Electronic Money Is Too Soon to Replace Cash

1430 WordsOct 14, 20086 Pages
Introduction Before using “money” in transactions, people bartered for what they want. However, Barter transactions can only occur where there is a "double coincidence of wants", that the seller must have exactly the things that the buyer wants and the buyer must have something the seller wants in return. It is hard to find these double coincidences, since it is very difficult to find two persons who can suit each other’s wants exactly (Roth, Sönmez & Ünver, 2005), and people have to know the exchange prices of all the goods in order to trade. It makes trading difficult to carry out. To make trading simpler, people created “Money” as a medium of exchange and to measure the value of goods. After that, in order to help trading become more…show more content…
It makes E-money difficult to replace cash. The difficulties in popularization To supersede cash, E-money should be popularized, but it is a hard work. This is because of the low acceptance of people and the high cost of applying E-money transaction system. For the acceptance of people, people use coins and paper notes as usual practice since many years ago. Although, a growing number of banks are trying to use a “click and bricks” strategy and introduce online services so as to attract more customers (Pennathur, 2001), it helps to promote using of E-money. However, people are not familiar with it and need time to adapt. Especially for the elderly people and people without technological knowledge, they usually resist and don’t how to use E-money. Also, E-money is still not so widely used now. To deal with the daily transactions, many of them cannot be done by using E-money. However, cash using is already adapted by people, and all transaction can be done by using cash. Therefore, Wonglimpiyarat (2007) writes “there seems to be no consumer response to the e-cash as a revolutionary means of payment transmission”. It put E-money in a disadvantageous position. On the other hand, the cost of applying E-money transaction system is very high. Because E-money can only use with the E-money products, specific electronic devices are needed to apply for E-money transaction. Also, “a system [of] … electronic money on cards and hard drives … functions efficiently if
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